• Acquisition of Brach’s will create the platform to
build an attractive consumer confectionery business in the U.S.,
the world’s single largest confectionery market, complementing
the company’s presence in the European consumer marketplace
• Strengthening Barry Callebaut’s distribution power in North
America through Brach’s established relationships with major U.S.
retailers
• Strengthening the company’s ability to provide broader
outsourcing and co-manufacturing platform to its global industrial
customers
• Increasing Barry Callebaut’s sales revenues in Consumer
Products by approximately 45% to one-third of total sales;
strengthening its turnover in the Americas by approximately 60% to
31% of total
• Joining a strong international group opens up new opportunities
for Brach’s both in the U.S. and in Europe
• Highly complementary in terms of geographic reach and product
range; cross-selling opportunities for both companies between
Europe and North America
• Restructuring of Brach’s manufacturing network to be
completed by end of 2003, allowing substantial cost savings and a
competitive cost structure
• Purchase consideration amounts to USD 16 million. In addition,
Barry Callebaut as-sumes the funding of Brach’s remaining
restructuring costs.
• Transaction is at least cash-EPS neutral as from year one.
• Barry Callebaut to introduce two-pillar business model,
grouping together Barry Callebaut’s Industrial and Sourcing
activities and the Food Service/Retail busi-nesses

Zurich, Switzerland / Woodridge, IL, USA, September 1, 2003 –
Barry Callebaut, the world’s leading manufacturer of high-quality
cocoa and chocolate products, has signed a contract with KJ Jacobs
AG to acquire Brach’s Confections Holding, Inc., based in the
suburban Chicago area. The transaction, which will be closed in
September 2003, will give Barry Callebaut a solid foothold in the
U.S. confectionery market and will complement the company’s
strong presence in the European consumer marketplace established
with the acquisition of the German Stollwerck Group in 2002.

Brach’s Confections is one of America’s leading
manufacturers of confections with sales of approximately USD 340
million / CHF 460 million (fiscal year 2002/03) and 1,600
employees. Founded in 1904 by Emil J. Brach, Brach’s produces
nearly 200 varieties of confections includ-ing hard candies,
chocolates and fruit snacks. The company is best known for its
StarBrites Mints®, Milk Maid Caramels®
and Maple Nut Goodies®. Brach’s is a wholly-owned
subsidiary of KJ Jacobs AG, which also has a major stake in Barry
Callebaut AG.

Building a strong consumer business to supply the
world’s two largest consumer confectionery markets

The transaction will bring together two companies that have long
traditions and are well-established in their respective markets.
The companies complement each other in geographic reach as well as
in product, service and customer portfolios. The transaction will
give Barry Callebaut access to new distribution channels and the
opportunity to strengthen and to extend relationships with large
retailers in the United States – the world’s single largest
consumer market and one of Barry Callebaut’s priority geographic
markets. In addition, it will reinforce the company’s ability to
provide a broader outsourcing and co-manufacturing platform to its
industrial customers. Brach’s and Barry Callebaut will also
benefit from shared best practices in product development,
manufacturing operations and customer relations.

The transaction will expand Barry Callebaut’s sales revenues
from its Consumer Products business by approximately 45% to
one-third of total sales. Total sales revenues generated in the
Americas will go up by approximately 60% to 31% of the total. In
fiscal year 2002/03, Brach’s and Barry Callebaut expect to
generate combined pro forma sales of approximately CHF 4.1 billion
/ USD 3.0 billion.

Strategic expansion into high value-added
segments

Including Brach’s (to be consolidated as of September 1, 2003)
and Stollwerck results, Barry Callebaut’s Consumer Products
business unit will generate approximately CHF 1.4 billion in sales
revenues in fiscal 2002/03. The expansion of this business unit is
fully in line with Barry Callebaut’s strategy to increase the
share of higher value-added products and services and to offer to
its industrial customers a broader outsourcing platform including
consumer products. At the same time, the transaction will further
reduce the share of revenue generated through sales of
semi-finished products, thereby also reducing earnings
volatility.
Brach’s (under its CEO Terence O’Brien), like Consumer Products
Europe of which Stollwerck is the largest part (under its President
Richard Crux), will be managed as a separate business unit while
the respective restructuring plans are implemented. Benefits
resulting from the con-solidation of Brach’s and Barry
Callebaut’s consumer activities in North America are expected to
be CHF 12-15 million per annum in cost savings as well as
incremental revenue potential through cross-selling. The
cross-selling opportunities include the distribution of
Stollwerck’s European premium chocolate products through
Brach’s in the U.S. and the sale of Brach’s confectionery
products in Europe.

In a later step, Barry Callebaut intends to combine Brach’s
and Stollwerck into one Consumer Products business unit to further
capitalize on the collective know-how of the businesses in the
areas of product development, manufacturing, and global account
management.

Attractive purchase conditions

Barry Callebaut will acquire 100% of Brach’s Confections
Holding, Inc., and a state-of-the-art factory in Vernell, Mexico,
recently constructed by KJ Jacobs AG. The total purchase
consid-eration amounts to USD 16 million, consisting of the
purchase price of USD 1.- for 100% of the equity of Brach’s and
USD 16 million of assumed net debt (working capital financing).
Fur-thermore, Barry Callebaut will provide Brach’s with funding
to cover the remainder of the re-structuring cost in the amount of
max. USD 48 million over the next 4-5 years. These restructuring
costs have been provisioned for by Brach’s prior to the
acquisition. The purchase condi-tions were confirmed as fair in a
Fairness Opinion made by Deloitte & Touche, an independent
audit firm.

Brach’s will have finalized the current reconfiguration of its
production network by the end of 2003. This will allow the company
to achieve substantial and sustainable cost savings, leading to a
competitive cost structure. Full cost benefits will come through in
fiscal year 2004/05.

Andreas Schmid, Chairman of Barry Callebaut: “The operational
expertise of Barry Callebaut as well as our experience from the
ongoing restructuring of the Stollwerck Group make us con-fident
that, together with local management, we will complete Brach’s
restructuring success-fully within the next four months. The
optimized cost structure will allow Brach’s to drive profit-able
growth in the future. As a result of this assessment and the
attractive purchase conditions, the Barry Callebaut Board
determined that the conditions and the timing were right to make
this acquisition.”

An attractive platform for building a global consumer
business

The combination of Barry Callebaut and Brach’s will ultimately
allow Barry Callebaut to build a global consumer business, meeting
the needs of globally active retailers and food manufacturers.

“With an aided awareness of 93%, Brach’s is a household name
in the United States. The ac-quisition of Brach’s allows us to
accomplish two strategic objectives at once: First, the
substan-tial expansion of our activities in the United States, the
world’s single largest consumer market, and, second, the creation
of an attractive platform to further build our consumer
confectionery business, with ultimately a global reach in mind,”
said Patrick De Maeseneire, CEO of Barry Callebaut.

Terence (Terry) O’Brien, CEO of Brach’s, said: “As we move
toward our 100th anniversary in 2004, Brach’s is excited about
the future potential we have in the U.S. and Europe as a result of
our alignment with Barry Callebaut. We are particularly interested
in new product develop-ment opportunities in premium chocolate, a
Barry Callebaut expertise, for which there is tre-mendous growth
potential in the U.S.”

Introduction of two-pillar business model for the Barry
Callebaut Group

With the expansion of its consumer business, Barry Callebaut
intends to make a greater dis-tinction between its Industrial and
its Food Service/Retail businesses. Consequently, Barry Callebaut
will adapt its business model to two pillars as of September 1,
2003 (beginning of fiscal year 2003/04):

The first pillar – Industrial Business – will group
today’s business units Cocoa, Sourcing & Risk Management and
Food Manufacturers, thus uniting all asset/working
capital-intensive activi-ties. The second pillar – Food
Service/Retail Business – will combine today’s business units
Gourmet & Specialties and Consumer Products including both
Stollwerck and Brach’s, group-ing the more value-added
products.

The company will adapt its segment reporting to the two-pillar
business model already for fiscal year 2002/03. Patrick De
Maeseneire, CEO of Barry Callebaut: “Our new two-pillar business
model underscores our commitment to building a strategic consumer
business, while continu-ing to grow our more traditional
businesses, and respecting the needs of our different customer
segments while keeping the advantages of being integrated and
global. Furthermore, this new model will help all our stakeholders
to better understand and value our performance and re-sults.”

About Barry Callebaut:
With annual sales of CHF 2.6 billion for fiscal year 2001/02 and
expected sales of approximately CHF 3.8 billion (including
Stollwerck) for fiscal year 2002/03, Barry Callebaut is the
world’s leading manufac-turer of high-quality cocoa and chocolate
products. Barry Callebaut operates some 30 production facili-ties
in 16 countries and employs approximately 7,200 people. The company
serves the entire food in-dustry, from food manufacturers to
professional users of chocolate to retailers.

The company’s customers range from industrial processors,
such as the world famous branded con-sumer goods manufacturers who
produce chocolate, confectionery, biscuits, dairy products, ice
cream and breakfast cereals incorporating Barry Callebaut’s
products, to artisanal users, including hotels, gas-tronomy,
chocolate makers, pastry chefs and bakers, to partners in the food
retailing industry for whom the Barry Callebaut Group produces
branded, customer label and other consumer products. Barry
Callebaut also provides a comprehensive range of services in the
fields of product development, proc-essing, training and
marketing.

Results for the full fiscal year 2002/03 (closing as of
August 31) will be published on November 11, 2003.

About Brach’s:Brach’s’ history
goes back to 1904. In fiscal year 2002/03 (closing as of August 31,
2003), the company, wholly owned by KJ Jacobs AG, generated sales
of some USD 340 million/CHF 460 million (estimate) and had about
1,600 employees. Roughly 95% of sales were generated in the United
States, making Brach’s the seventh largest manufacturer in the
U.S. confectionery market. The remaining approxi-mately 5% of sales
were generated in Canada, Mexico, Puerto Rico, in various Caribbean
countries and Central/South America.

Brach’s is a household name for confections in the U.S.
among American consumers; the brand name has an aided awareness of
93%. Approximately 60% of total sales are sugar candy products,
with approx. 20% each in chocolate products and fruit snack
products, the fastest-growing segment since 2000. Brach’s is best
known for its StarBrites Mints®, and Milk Maid Caramels® products
and its loose confections sales programs: Fresh Candy Shoppe and
Pick-A-Mix. Brach’s products are produced in three production
facilities in the U.S., at a factory recently constructed by KJ
Jacobs AG in Northern Mexico (Vernell), and by some outsourcing
partners.

Brach’s distributes its products through all major retail
channels including grocery stores, drugstores, mass-merchandisers
(such as Wal-Mart or Kmart) and club chains (such as Sam’s) and
is thus well es-tablished in the American market.